Optimizing Merger Targets, Pelindo Is Expected to Tighten Collaboration with Private Sector

The merger of state port operators PT Pelabuhan Indonesia (Pelindo) I to IV on October 1, 2021, is expected to strengthen supply chain management and logistics services in Indonesia in the long term, Indonesian Logistics and Forwarders’ Association (ALFI) has said.

Moreover, the merger has put Pelindo in a very strategic position. The merger has made Pelindo stronger in assets, human resources, and financial aspects.

Even, this merger, said ALFI Chairman Yukki Nugrahawan Hanafi, will not only make Pelindo be able to create national logistics efficiency, but further, to encourage it to become a global player by expanding its port service business abroad.

According to Yukki, some global port operators have been on their top performance as they expand to other countries through acquisition of some local ports, while on the same time they increase their domestic ports’ capacity.

“There is actually a limit in port business and activities while on the other hand logistics business is limitless. So, the Ministry of BUMN (state owned enterprises/SOEs Ministry) should encourage a strong supply chain. The Ministry should take risk to make policies and action in strengthening the supply chain,” Yukki said on press statement this morning (Sunday, October 3).

Yukki calls for collaboration with the private sector and micro, small and medium business (UMKM) in building an ecosystem. “Don’t make a competition with UMKM,” he reminds.

“The key is building collaboration with the private sector. It would be great if collaboration could be done. So, this merger is more down to earth, building an ecosystem together. It is true that Pelindo has its business focus, but UMKM should also be a concern,” he said.

Yukki, who is also the Chairman of the Asean Federation of Forwarders’ Associations (AFFA), said that the Pelindo merger was expected to be able to attract investment in the transportation, logistics and ports sector in Indonesia, in order to boost national economic growth (GDP) and to achieve the government target growth of over 7%.

“The merger has made Pelindo as the 8th largest port operator in container throughput. But, don’t stop there. The merger should be able to improve supply chains in Indonesia. Further, Pelindo is expected to be able to manage more ports not only in Indonesia, but also abroad,” he said.

Yukki affirmed the market’s positive sentiment to this merger, both domestic and international market. In general, any corporation actions of merger and acquisition are awaited mostly by business players as they will create domino effects. Moreover, the Pelindo merger has been planned for a long time.

“This is so strategic for Pelindo. Now, it is on Pelindo’s hand how it will optimize this strategic position. Of course, it needs long term comprehensive plans in business development, operation, and financial aspects. We are all waiting for its realization of its merger target,” said Yukki.

Therefore, he expects this merger will not relate to a corporate action only, but to support easiness for service users by prioritizing simplification of the port service bureaucracy in Indonesia.

“It is true, it takes time to achieve all of these targets. However, for us (business players), this merger in principle is a positive and progressive step. All parties and related stakeholders should continue to support it,” said Yukki.

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